Digital estate planning: Protecting your online legacy

Digital assets include a wide variety of things that exist only in digital form, can create value, and have distinct usage rights. Simply put, digital assets can be almost anything you keep digital records of.

Some examples of digital assets include:

• E-mail accounts
• Online financial accounts (e.g. bank accounts, credit cards, cryptocurrency, non-fungible tokens [NFTs], etc.)
• Online subscription based accounts (e.g. Netflix, Adobe Photoshop, Spotify, etc.)
• E-commerce or marketplace accounts (e.g. Amazon, Shopify, Etsy, etc.)
• Social media and dating accounts
• Cloud- or online-based photo storage accounts
• Cell phone apps
• Online accounts for bills or utilities
• Online chatroom accounts
• Online gaming accounts
• Cloud-based accounts
• Loyalty program accounts and benefits (e.g. credit card benefits, frequent flyer mileage, loyalty points, etc.)
• Any other form of personal information stored on your laptop, computer, cell phone, tablet, or other electronic device

It is important to note that while digital accounts (like financial accounts) may be a digital asset, the financial assets themselves (e.g. money in the bank, cryptocurrency coins, etc.) would be accounted for in a traditional estate, and may be subject to estate planning laws.

While you might have already started thinking about, or planning, what happens to your money, property, and other valuable possessions after you pass, you may have forgotten to address your digital assets. Years worth of information, photos, and other media stored online, along with sensitive account information, can be difficult to access if you do not leave instructions on how to handle these assets after you are no longer here.

A digital estate plan can ensure your family can rely on a written plan outlining who will manage what digital accounts and how to access them. This may help relieve your loved ones of stress that often follows a death.

Furthermore, digital asset planning can also help safeguard your online accounts from the possible risk of fraud and identity theft. By leaving your family with clear instructions on how to manage your accounts, you can mitigate the risk of unauthorized access to sensitive information.

Digital estate plan vs. will

Contrary to a will in a traditional estate plan — a legal document outlining how your assets will be distributed after you pass away — a digital estate plan is more informational, and doesn’t necessarily grant legal ownership of your digital assets. Since you most likely do not have ownership rights to online subscriptions or accounts, a will cannot legally grant you those rights.

While you can add a provision in your will mentioning your digital estate plan, it is not recommended to list sensitive information from your digital assets in your will. This is due to the fact that if a testator’s will enters probate, it will become a public record. Since anyone can access your will, you may not want to list private account information for the world to see.

Getting started with estate planning for your digital assets doesn’t have to be complicated. This six-step guide can help you ensure your digital assets will be kept safe and distributed accordingly when you are no longer here.

1. Make an inventory of your digital assets

The first step toward digital estate planning is creating an inventory listing all of your digital assets. You can use the examples listed above to help you get started. Make sure to be thorough when listing digital assets in estate planning, and include accounts from music streaming platforms, to social media, to online banking accounts.

Once you have your complete list of digital assets, you will need to write down the username, or e-mail, and password associated with each account. You may also want to include any information associated with two-step verification, when relevant.

2. Determine how your digital assets will be distributed

Now that you have listed all of your digital assets, you need to provide instructions on how those assets should be distributed. It is also important to note if you want any accounts to be erased or deactivated after you pass away, and if you want information on those accounts to be saved or permanently erased.

Many platforms, such as Google, Apple, and Facebook, now allow users to designate what happens to those accounts in case of inactivity, emergencies, or death. These tools may override your digital estate plan, so make sure you are being consistent to avoid any unnecessary debates.

As mentioned above, financial assets within digital assets are treated differently. If you have digital assets with financial value, like an online bank account, you may also want to specify who will inherit those assets. This is something you can also incorporate in your traditional estate plan.

3. Appoint a digital executor

You will need to appoint a digital executor for your digital assets. If you already have an executor for your will, you can choose the same person. However, if you prefer a different executor, it is important that they are aware of their roles, as they may have to work together in the future.

Make sure you name your executor in your will or in a separate document referenced in your will. Because you are dealing with digital assets, you may want to ensure your executor is someone who is comfortable with technology.

4. Follow the law

Under the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), your chosen fiduciaries are granted the legal authority to access and manage your digital assets after you pass away or become incapacitated. The RUFADAA has been adopted by most U.S. states and allows executors to manage your digital assets as long as you:

Give explicit permission in legal documents.

Comply with the service provider’s terms of service.

You may want to work with an estate planning attorney to ensure your documents are RUFADAA compliant.

To legitimize your digital estate plan, you may also want to add a note — or codicil — to your will, as certain states may not acknowledge digital estate plans. You can also consider speaking to an estate planning attorney to ensure you meet state-required rules that legalize your estate planning for digital assets.

5. Find a safe place to store your digital estate plan

To ensure your digital estate plan remains safe, you can consider giving it to your attorney or locking it in a safe or other secure place. If you decide to lock it up, ensure your digital executor knows where to find it when the time comes.

Since you are dealing with private information, you most likely will not want to give others access to your accounts — such as your personal e-mail account — while you are still here. You also don’t want to risk any unauthorized person accessing your accounts while you are still alive; therefore, it may be wiser to keep your passwords in a secure place until they are needed.

6. Update your digital estate plan

Now that you have the essential guidelines down, it is important to remember to occasionally update the digital assets in your digital estate. This can include adding or deleting account information, maintaining consistency if you use predetermined tools (see Step 2), updating privacy choices, or changing who you appointed an account to.

You will also want to communicate with the people you’ve appointed, so they are aware of your estate plan. Doing this can also help your family know what to expect when it comes to managing your digital assets after you pass away.

Living in a digital world, with people continuing to develop a greater online presence, it can be easy to lose track of how big your digital footprint is. Digital asset estate planning can help you ensure your digital assets are secure and well-managed after you pass away.

If you are trying to get your digital assets in order, Raisin can help. The Raisin marketplace gives you access to various savings products all in one portfolio. Forget multiple usernames and passwords, with one login, you can access high-yield savings accounts, certificates of deposit, money market accounts, and more.

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.